Mortgage debt - an update

The housing market showed some sign of recovery in March, according to the Nationwide House Price Index.

According to the Index, the average price of a property rose by 0.9% in March, rising from £147,746 to £150,946.

Even though Fionnuala Earley, Nationwide`s Chief Economist, warned that "it would be unwise to draw strong conclusions from the significant slowdown in the annual rate of fall" and that "it is far too soon to see this as evidence that the trough of the market has been reached", many homeowners across the UK will be pleased to see any evidence of an improvement in the housing market.

"Although any change in the value of their house won`t alter a homeowner`s actual mortgage debt," said a spokesperson for debt management company Gregory Pennington, "a rise will increase the amount of equity they own, decreasing the risk of negative equity - a threat which has become all too real for many of the nation`s homeowners recently.

"However, the Bank of England has revealed that homeowners `injected` over £8 billion of housing equity in the final three months of 2008. The recent spate of base rate cuts has drastically reduced the cost of many homeowners` monthly mortgage payments, allowing them to overpay - reducing their mortgage debt - without actually spending more than they`re used to."

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Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.